Keynote by Ivan Fartunov - Ecosystem Lead, Aragon

everyone. We we we we teed this up really well. So, um you know, we were we were talking with SIP about like you know what the problem is and how they're thinking about the solution. And now I'm going to go talk about the solution. Um I'm Avan.

I'm uh one of the co-founders of Generic. Um and actually Status is uh the first network that's going to implement our protocol. So, I'm going to talk a bit more about how the protocol looks like and how it works. Um, turns out I have more time than I actually thought. So, I don't know if I'll be able Okay.

God damn it. Okay. Okay. So, um I mean [snorts] we talked a bit about this but um you know we have some cool graphs here of the problem that I just mentioned which was like activity on a network usually dies after the airdrop. um these networks expend a lot of resources to attract TVL.

Uh and yet the actual beneficiary of that TVL are the issuers of stable coins um that sit in the background and you know like Tether by the way the most profitable company per employee in the history of of of of humanity. Um so they they they keep a lot of the benefit while distribution partners which are roll-ups but also DAPs are the ones that actually carry the weight and the cost of like creating this distribution creating demand. Um so what does that mean? Uh this means that like networks and apps end up spending a lot of uh resources on incentives. It also means that you end up with like poor user experience and all around like generally disappointment in the market because like most of the benefit for from this system occurs to the so-called issuers.

Um so you know why do we think that this is a problem that like it's finally time to solve this right like it's it's it's not news. We've we've been through like several cycles. Uh yes, the past few years have been a bit exaggerated because of like the valuation of the roll-ups that are launching and because sort of the the game has become a lot more efficient of okay, I'm going to you know pump incentives into an ecosystem. I'm going to grow TVL. Hopefully somebody's going to stick around afterwards.

Um but um there are other aspects of this dynamics that make us believe that like now we're in a good place to solve this whole like uh concentration of benefits to a few stakeholders that are otherwise largely external to the interaction, right? Like they're not building protocols on the roll-ups. They're not the roll-ups themselves. They're not the users of the networks. They're just like issuing a token, right?

Um and you know there are quite a few projects that have been working on you know bringing rwas on chain right uh and at this point like issuance is actually becoming commoditized. We're seeing this as like historically the issuers were keeping like all of the benefit for them. Now like some of that is starting to trickle down towards uh the distribution layer which is DAPs and rollups and and and D5 mullets etc. [snorts] Um we believe that this process is going like way slower than it could be. Um so this is one of the of the trends that's going on and then there is like another one which is we have fragmented liquidity that is basically driven by the fact that the being an issue was a lucrative business.

So everybody was like okay I'm going to issue my own asset and like I'm going to brand it and yella ya ya. Um so user fragmentation issuance is a commodity. At the same time onchain native yield has become more scalable and credible and sustainable. So this means that there is an opportunity to democratize access to yield and liquidity without the complexity of relying on an issuer. So this is what we do basically.

So so we allow any project or network to launch a native stable coin and benefit from composible liquidity and the best onchain yield all without the need for an issuer. Right? There might be like an issue on record for regulatory purposes, but there isn't a counterparty issuer. You don't depend on an entity somewhere holding tibials on your behalf and you don't have to share the economics with them. Uh so how does that work?

Um I'm going to try to walk you through this relatively quickly. So basically let's take the example of a network. Do I have a pointer here on this thing? Oh, amazing. Awesome.

Okay. So, so if we take the the example of a network, let's say status, right? So, um a user that is bridging to that network would just deposit USDC, USDS, USDT asset into a bridging contract or what would they they would consider a bridge. uh that asset on mainet goes into yield opportunities with uh we are starting to do this with morph volts and stakehouse as the most uh secure and scaled curator. [snorts] Um so assets start earning y on the L1.

Meanwhile, user just gets GUSD uh on the rollup and they use that as the default dollar of a network. So they can do whatever they want. You know, they can go LP, they can go provide liquidity on a on a money market. They can use it to play a game, buy NFTts, buy assets, punch it coins, uh you know, use it to uh access leverage on a per deck, etc. The the the point being like it's just the default representation of what a dollar is on that specific network.

Um meanwhile, the assets on the L1 are earning yield. We funnel that yield to the network. So, it doesn't follow directly the user. So it's unlike you know you you can think of like staked Atheina or staked USDS um here yield doesn't follow the user directly it goes to the network which um you know in the context of the previous conversation this gives that network a lot more strategic flexibility of how they redistribute this yield to incentivize desirable behavior on chain right so for example like I don't want everyone who holds the asset on the network to just automatically can receive the yield. I actually want people to potentially create very deep liquidity pools on a on a network native deck so that I can create uh lending markets that have high caps because you it's easy to like unwind positions and you know like uh serve liquidations for example.

So because of that flexibility, this brings um a lot more sovereignty to the network itself in how they grow and how they incentivize behavior. [snorts] Um so why does this matter? Why does it make sense and why we think it's better than a tu wrapper? Um so like yield it can be better. Uh at the moment the gap is not as drastic as we believe it can be but the Fed is cutting rates yields will be going down in in the normie space.

Uh and usually that is associated with like a risk environment which would push the yields [snorts] on chain higher. So that gap is structurally positioned to grow. Um it also means that you have sovereign yield. So it's a simple um user on boarding flow but as a network you also get like complete freedom of how where and when you incentivize. Um we provide you with a flexible implementation which basically means that as a network you can do whatever you want in terms of like branding.

We can do compliance. So you can you can do your own uh you can you can layer your own KYC or or or privacy um functionality on top of that like generic asset. Uh [snorts] we thought about the name quite a bit. Um uh and then you know we're also building out an environment where you would be able to like express different risk preference so that different instances would have somewhat different riskreward profiles. Uh the the reason why like this is not trivial is that we actually don't want to lose the composible liquidity right like the idea is this needs to be something that you can mint redeem freely without a company in the middle and um that is composible across ecosystems and across DAPs.

Um when I said without a company in the middle because there is no issuer this means that there is no administrative overhead but it also means that there is no economic conflict because there is no like on the other side it's it's the market I don't need to strike an agreement with whoever is cussing my tibial um I'm just pulling liquidity from a morpho potentially like other opportunities further down the line but this also means that if the team behind generic disappears tomorrow this thing will continue existing and serve mint and redeem requests by the by the users of the platform and like ultimately we're or some of us are here to build permissionless and and unstoppable tech. [snorts] Um and that's the principle with which we've been designing generic. Uh feel free to reach out. Thank you.